Wednesday, February 03, 2010

I Thought I Saw A Ray of Hope - NAH!

This news was reported in December but I can't help but wonder how is it going to help in any way?!?!

Quoted from Asiaone website,

"Cap on telco contract lengths and penalties"

Wed, Dec 16, 2009
my paper

By Kenny Chee
SINGAPOREANS can expect more competitive telco services next year, under new guidelines that recommend shorter contracts and lower termination fees.
Yesterday, the Infocomm Development Authority of Singapore (IDA) released guidelines that require a cap of two years on the contract period for fixed line, broadband and mobile phone contracts.

My reply, "ah huh? How? I've not been told to sign a contract beyond 2 years lor! They should revise it to 1 year instead."

In addition, fees levied on consumers for ending these service contracts early have to be graduated on a monthly basis, so that they pay less if they terminate it later in the contract period.
My reply, "I believe it's not much of a difference from what is offered now. Since I'm using starhub, they offer lower termination penalities when you're into the later part of you're contract."

The fees should also not include costs that the operators can avoid incurring when consumers terminate their service, such as back-end administrative and operational costs.
Some bundled services now have contract periods over two years, and a flat fee is often charged for early termination of a contract, industry players said.
If a telco does not comply with the new guidelines, the IDA may take action against it, said the IDA yesterday.
This could take the form of warnings, a direction requiring the telco to take corrective action to ensure compliance, and financial penalties.
The guidelines will come into effect from March 1 next year for new and renewed contracts.
Present Contracts
  • M1
All its service contracts do not exceed two years. Most of its consumer mobile-phone plans have a $300 early-termination charge. But the telco has graduated early-termination fees for its Take3 mobilephone programme, which allows consumers to use a phone with an M1 plan without having to buy the phone.
  • SingTel
Many of its existing service contracts last for two years. Early-termination charges vary across service plans. For example, for its iPhone two-year plans, customers who terminate after three months into the plan pay a $856 equipment charge.
  • StarHub
Its standard contractual term for mobile and broadband services is two years, depending on the type of premiums given. It has graduated early-termination charges for mobile-phone plans, ranging from $214 to $535, with lower fees for termination later into the contract.
The IDA said that the guidelines seek a balance between protecting consumers' interests and giving telcos freedom in creating service plans.
It added that the two-year cap for contracts should not adversely affect the telcos as most service contracts today do not exceed two years.
The IDA said that the measures were released after a public and industry consultation that began last December.
This had been prompted by consumers' concerns that contract periods might be becoming "unduly long" and early-termination charges "excessively high", said the IDA.
Its deputy chief executive, Mr Leong Keng Thai, said: "In promoting effective competition in the telecoms sector, we have to lower barriers for consumers to terminate services...and (for them) to switch from one operator to another to enjoy more attractive or competitively-priced services."
He added that the new guidelines would help to achieve this, and the IDA would encourage telcos to provide no-frills services with shorter contract terms.
StarHub said that "we are prepared to implement IDA's new guidelines", while Mobile- One (M1) and SingTel said they would be reviewing and studying the guidelines.
As IDA could take action against non-compliance, the telcos will probably adopt the guidelines, said Mr Kenneth Liew, a senior market analyst with technology-research firm IDC Asia-Pacific.
This would make it easier for consumers to switch between telcos, he said.
But Mr Marc Einstein, an industry manager with market-research firm Frost & Sullivan, said that while prices of plans could drop further with competition, the prices of the hardware tied to the plans, like mobile phones, may go up.
This is because operators would be less willing to subsidise the costs of the devices as they will have to bear an increased risk of losing customers, he said.
Auditor Aaron Chua, 24, said that IDA's move is good as consumers unhappy with a telco's services can now switch telcos more easily, without worrying about fixed early-termination fees.
But entrepreneur Darryl Kang, 29, said that the guidelines would not make much difference to him.
He would not hesitate to pay a high termination charge of up to $400, if he did not like a telco's service.
"It's down to the price of the plans and service quality for me," he said.

After reading this article, I do not see any help at all. 

In fact they should look into one of their terms and conditions regarding the mobile plans that were offered for iphone. 

Why in a world should a customer who has paid more for those plans as compared to the normal cheaper plans, be slammed with a higher re-contract penalty. I'm not even talking about a termination penalty, it's a re-contract - meaning I'm staying with them longer and letting them earn my dollar. Yet, I have to pay more to re-contract?! I

understood that Singtel might have done that earlier since they had the advantage to monopolise the market with their iPhone but now all 3 telcos are offering iPhones, shouldn't they eliminated that ridiculous rule and find ways to retain current customers and not throw them in a corner to rot once they've signed up for their service.

Tsk! Tsk! 

IDA should look into this as I don't see why only iPhones get this penalty. It's still a phone like every other brand in the market. Its silly, really! I paid so much less for my powervalue 100 plan and almost double for my smart surf, yet their penalty for recontract for a plan costing $29.90 as $100 and a plan that cost $38 as $200?! LMAO! So if a person pay them $500 a month for their services, should you revise their penalty to like $300 or $400???

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